After installation vboxvideo is loaded much earlier (no rootfs to
unpack) and getting userspace up and running takes a few seconds, so
once X is started the native driver is ready and everything works as it
should.

On the live-session though, the xserver realizes a new device has
arrived and loads modesetting on it (with VESA already loaded) and we
get this mess. While this is a bug in the X stack, getting it fixed
properly before release is unlikely, because it's a fringe case no-one
else is seeing.

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You received this bug notification because you are a member of Desktop
Packages, which is subscribed to xorg-server in Ubuntu.
https://bugs.launchpad.net/bugs/1796822

Title:
  Desktop live cd boots corrupted screen in Virtualbox on Bionic

Status in xorg-server package in Ubuntu:
  Confirmed

Bug description:
  On a Bionic host running the standard archive version of Virtualbox
  and the daily ISO of Cosmic, the live session starts with a corrupted
  graphical display, as can be seen here:

  https://imgur.com/a/rkTId4S

  (also attached)

  Switching VTs to 2 and back to 1 clears the display and things work
  again.

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